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The Corporate Sustainability Reporting Directive (CSRD) is a major step forward in standardizing sustainability reporting within the European Union. Building on the Non-Financial Reporting Directive (NFRD), the CSRD aims to enhance transparency by requiring companies to disclose structured and verifiable environmental, social, and governance (ESG) data.
However, the Omnibus proposal, introduced in 2025, has significantly altered some aspects of CSRD compliance. These updates are aimed at reducing administrative burdens and focusing on larger companies with substantial economic impact. This guide will help you navigate the latest changes and prepare for compliance.
Note: In February 2025, the European Commission proposed several changes to the CSRD to simplify reporting requirements. These changes are currently pending approval.
The original reporting deadlines have been pushed back:
Limited assurance remains the primary requirement for now, with the European Commission planning to issue targeted guidelines by 2026.
The Omnibus proposal eliminates sector-specific sustainability reporting obligations, reducing compliance complexity.
All CSRD reports must be machine-readable and tagged in XHTML format, making them easily accessible for investors and regulators.
If your company meets the new CSRD thresholds, you will be required to report sustainability performance in accordance with the European Sustainability Reporting Standards (ESRS).
A CSRD-compliant report must cover:
Given the complexity of CSRD reporting, companies are increasingly turning to AI-powered software solutions to streamline compliance. Below are best practices and how you can get your CSRD report done with Karomia.
If you've conducted your assessment through the Karomia platform, select the relevant assessment from the dropdown menu. This ensures maximum detail and structured data for generating your CSRD report.
If you conducted your double materiality assessment outside the Karomia platform, you’ll be prompted to select all subtopics identified as material. Externally conducted assessments may require additional validation to ensure consistency with CSRD standards. Karomia’s platform streamlines this process by structuring and aligning inputs with regulatory requirements.
Discover how to conduct your double materiality assessment through the Karomia platform.
To maximize data prefilled by Karomia AI, upload all relevant ESG documents, including:
Avoid uploading outdated, duplicate, or irrelevant files, as this can lead to inefficiencies in AI analysis and increase manual review time.
Based on the uploaded data, Karomia AI generates initial answers for your report scope, flags missing data, and suggests disclosures. This is commonly known as the Gap Assessment. However, with Karomia, this step is seamlessly integrated into the report completion process, eliminating the need for an additional step.
Start by reviewing all data points marked as ‘Incomplete’, flagged due to missing elements. The AI compares each answer against CSRD requirements and identifies gaps that need attention.
You can fill in missing elements manually or use Karomia’s AI assistant for an efficient process. Learn more about AI assistance.
After updates, refresh missing elements to verify that all required information has been included. Once a data point is complete, mark it as ‘Complete’ and finalize it by changing its status to ‘Validated’.
To streamline collaboration, you can assign tasks and track reporting progress within the platform. Discover Karomia’s collaboration.
Once all data points are validated, you’re ready to generate your final report. In the Karomia platform, this is called the “Report for Publication”.
Karomia’s AI not only consolidates the data but also structures and formats it according to CSRD’s Sustainability Statement requirements, ensuring compliance while minimizing manual adjustments.
The Report for Publication compiles all disclosures (e.g., E1-1) into a clear, compliant report with structured text and tables, avoiding redundancies while maintaining accuracy.
This ensures no critical information is lost while keeping data close to its original wording, reducing the need for extensive revisions.
For more details on generating your CSRD report with Karomia’s software, read our operational guide.
The CSRD framework is evolving, with stricter sustainability regulations on the horizon. Here’s what businesses should prepare for:
While ESG reporting enhances transparency and accountability, many organizations, especially smaller ones, struggle with its complexity. Expect growing calls for streamlined and standardized reporting processes.
AI-powered sustainability tools are transforming ESG reporting, helping businesses automate compliance, reduce errors, and improve efficiency.
ESG is no longer just a compliance task. It must be embedded across all business functions, not siloed within a single department.
Gain insights from five ESG professionals on the future of reporting, evolving roles, and emerging technologies. Read Beyond Compliance: The Future of ESG.
With tightening ESG regulations, companies that proactively integrate CSRD best practices will gain a competitive edge, enhancing sustainability, attracting top talent, and earning investor trust.
With CSRD compliance deadlines approaching, companies need to take proactive steps to streamline their ESG reporting processes. The Omnibus proposal has introduced important simplifications, but sustainability transparency remains a competitive advantage in today’s market.
Key Takeaways
By leveraging AI-driven ESG reporting software, businesses can reduce administrative burdens, improve accuracy, and ensure compliance with CSRD requirements, turning regulatory obligations into a strategic opportunity.
Ready to simplify your CSRD reporting? Book a demo with us to see how automation can transform your ESG strategy.
A CSRD report follows the European Sustainability Reporting Standards (ESRS), covering governance, strategy, impacts, risks, and opportunities. It requires digital tagging for transparency and comparability.
Companies that are sustainable and transparent about it are more competitive: customers want sustainable products, employees choose companies that align with their values, and investors are backing sustainable businesses.
CSRD requires disclosures on environmental, social, and governance factors, including climate change mitigation, biodiversity protection, social and employee matters, respect for human rights, and anti-corruption measures.
Non-compliance with CSRD can lead to legal penalties, reputational harm, and loss of investor trust, as companies are obligated to provide transparent sustainability information.
Yes, CSRD applies to banks, insurance companies, and large listed companies, requiring them to disclose sustainability-related information.
Yes, CSRD is mandatory for large companies, including banks and insurance firms, with reporting phased in from 2024 onwards. However, this requirement may change due to the Omnibus proposal.